Procedure for Registration of Gift Deed of Immovable Property in India
The registration of a gift deed for immovable property is a legally binding process that transfers ownership from the donor (the person giving the gift) to the donee (the person receiving the gift). The procedure for registration involves several steps, including drafting the deed, paying the appropriate stamp duty, and registering the deed with the Sub-Registrar of Assurances. Below is a detailed explanation of the procedure along with the relevant legal provisions.
1. Understanding the Gift Deed
A gift deed is a legal document that voluntarily transfers ownership of property from one person (donor) to another (donee) without any monetary consideration. The transfer of immovable property through a gift deed is governed by the Transfer of Property Act, 1882, specifically under Section 122.
- Section 122 of the Transfer of Property Act, 1882: Defines a gift as “the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.”
2. Drafting the Gift Deed
The first step in the process is to draft the gift deed. This document must be carefully prepared to include all essential details:
- Details of Donor and Donee: Full names, addresses, and relationship between the donor and donee.
- Description of Property: Detailed description of the immovable property being gifted, including the location, boundaries, and any other identifying details.
- Declaration of Gift: The deed must clearly state that the gift is being made voluntarily, without any coercion, and without any consideration.
- Acceptance Clause: The donee must accept the gift, and this acceptance must occur during the lifetime of the donor.
- Rights Transferred: The deed should mention that all rights, title, and interest in the property are being transferred to the donee.
- Signatures: The deed must be signed by both the donor and the donee, and it should be witnessed by at least two witnesses.
3. Valuation of the Property
Before the registration, the market value of the property must be determined. This is important for calculating the stamp duty, which is a legal requirement. The valuation can be done by:
- Government-approved Valuation: The property should be valued as per the guidelines provided by the local authority or the Stamp Valuation Authority. The market value will be the basis for calculating stamp duty.
4. Payment of Stamp Duty
The next step is to pay the stamp duty, which is a tax levied on the execution of the gift deed. The stamp duty varies from state to state and is governed by the Indian Stamp Act, 1899 and relevant state amendments.
- Indian Stamp Act, 1899: Under Section 3 of the Indian Stamp Act, stamp duty is required to be paid on the instrument of gift. The rate of stamp duty on a gift deed varies depending on the state and the relationship between the donor and donee. For example, lower rates are often applicable when the gift is made to a close relative (e.g., spouse, children, siblings).
- Mode of Payment: The stamp duty can be paid via e-stamping, purchasing stamp papers, or franking, depending on the state’s provisions.
5. Execution of the Gift Deed
After paying the stamp duty, the gift deed must be executed. Execution involves the signing of the deed by the donor, donee, and witnesses in the presence of a Sub-Registrar.
- Witnesses: The deed must be signed by at least two witnesses who attest to the voluntary nature of the gift and the signatures of the donor and donee.
6. Registration of the Gift Deed
Registration of the gift deed is mandatory under the Registration Act, 1908, specifically under Section 17. This step is crucial as it provides legal validity to the transfer of ownership.
- Section 17 of the Registration Act, 1908: States that the registration of gift deeds involving immovable property is compulsory.
- Sub-Registrar’s Office: The deed must be presented for registration at the office of the Sub-Registrar within whose jurisdiction the property is situated.
- Verification: The Sub-Registrar will verify the identities of the donor, donee, and witnesses, and ensure that the deed has been executed voluntarily.
- Payment of Registration Fees: A registration fee is payable, which varies by state but is generally a percentage of the property value.
- Recording of Deed: After verification and payment of fees, the Sub-Registrar will record the deed in the official records.
7. Issuance of Registered Gift Deed
Once the deed is registered, the Sub-Registrar will issue a registered gift deed, which serves as proof of the transfer of ownership. The registered deed is then returned to the donee, who should keep it safely as evidence of ownership.
8. Mutation of Property Records
After the registration of the gift deed, the donee must apply for the mutation of property records in their name. Mutation is the process of updating the property records in the local municipal or revenue records to reflect the new ownership.
- Application for Mutation: The donee must submit an application along with a copy of the registered gift deed to the local municipal or revenue office.
- Mutation Fee: A nominal fee is usually required for the mutation process.
- Updating Records: Once the mutation is completed, the donee’s name will be entered into the property records, making them the official owner of the property.
Legal Provisions to Remember:
- Section 122 of the Transfer of Property Act, 1882: Defines the gift of property.
- Section 17 of the Registration Act, 1908: Mandates the registration of gift deeds for immovable property.
- Indian Stamp Act, 1899: Governs the payment of stamp duty on the gift deed.
Conclusion
The registration of a gift deed for immovable property in India is a detailed process governed by multiple legal provisions. It involves drafting the deed, paying the appropriate stamp duty, executing the deed with the necessary witnesses, and registering it with the Sub-Registrar of Assurances. Following the registration, the donee must ensure that the property records are updated through mutation. Adhering to these steps ensures that the transfer of property is legally valid and binding.
Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.
Adcocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)
Contact: 88271 22304